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Food Processing in Brazil Final Customers Identification

Customers Categorization

The final customers in the Brazilian food processing value chain can be broadly categorized into two main segments: Business-to-Business (B2B) and Business-to-Consumer (B2C).

The B2B segment primarily consists of businesses that purchase processed food products for further processing, resale, or use in their own operations. This includes:

  • Food Service Establishments: Restaurants, hotels, cafes, bars, and institutional caterers (for businesses, schools, hospitals). These entities purchase a wide range of processed foods, ingredients, and ready-to-use products to prepare meals and serve to their own customers.
  • Retailers: Supermarkets, hypermarkets, smaller grocery stores, convenience stores, and specialty food stores. These businesses buy processed food products from distributors and processors to sell directly to individual consumers.
  • Other Food Businesses: This can include smaller food processors who use ingredients from larger processors, as well as businesses in the travel sector (airlines, railways) and educational institutes that provide food services. Cash-and-carry (atacarejo) operators also fall into the B2B segment as they sell to smaller retailers and food service providers, although they also serve B2C customers.

The B2C segment consists of individual consumers who purchase processed food and beverage products for personal consumption. This occurs primarily through:

  • Retail Channels: Consumers buy products directly from various retail formats, including physical stores (supermarkets, hypermarkets, local markets, convenience stores) and increasingly, online retail platforms.
  • Food Service Channels: Consumers purchase prepared meals and beverages from restaurants, cafes, bars, hotels, and through food delivery services.

Characteristics and Demographics of Customers

B2B Customers:

The characteristics of B2B customers in the Brazilian food processing industry vary depending on the specific segment:

  • Food Service Establishments: This is a vastly fragmented market in Brazil, with over 2.5 million small shops, including bars, restaurants, bakeries, and dark kitchens, accounting for approximately 70% of food service consumption. The 10 largest restaurant chains represent a smaller share, around 10-12% of the market. These businesses prioritize factors like the quality, diversity, and sustainability of food options. They seek reliable suppliers who can provide fresh, innovative products and often require specific packaging and delivery schedules. Procurement can be time-consuming for smaller operators, with some spending up to 20 hours per week on sourcing goods through various channels, including online platforms and direct communication with suppliers. Efficiency in procurement and reliable delivery are crucial as cost of goods sold can represent a significant portion of their sales. The catering market in Brazil, a part of the food service sector, is valued at around USD 3.5 billion in 2024 and is projected to grow, driven by the expansion of corporate offices, educational institutions, and the healthcare sector.
  • Retailers: The retail food sector had a significant turnover of R$ 1.067 trillion in 2024. [Value Chain Analysis - Industry Research] This segment includes large national and international chains (like Carrefour and GPA, which includes Atacadão) and a multitude of independent stores. [Value Chain Analysis - Industry Research] Large retailers often have significant market power, influencing negotiations with processors and distributors regarding pricing, payment terms, and product placement. [Value Chain Analysis - Commercial Relationships] Cash-and-carry operators like Atacadão are a predominant format in Brazil, catering to both B2B (smaller retailers, food service) and B2C clients, offering competitive pricing through bulk sales and a warehouse-like model.
  • Other Food Businesses: These businesses' characteristics are largely defined by their specific operational needs and the products they require for further processing or incorporation into their services. For example, the B2B food e-commerce market is growing, indicating a trend towards online procurement for various businesses. Companies in the food industry, when acting as buyers in a B2B context, value suppliers who can adapt to their needs, offer effective purchasing channels, provide functional products, and possess technical knowledge.

B2C Consumers:

Brazilian B2C consumers constitute a large and diverse market of over 212 million people with varied socio-economic statuses, ethnic backgrounds, and tastes. Key characteristics include:

  • Price Sensitivity: A significant portion of Brazilian consumers are price-driven and actively compare prices, even for small items. The attractiveness of value retail formats like cash-and-carry demonstrates this price consciousness.
  • Growing Middle Class: Brazil's burgeoning middle class, comprising around 47% of the population, has increasing disposable income, contributing to the demand for convenience foods, including frozen products.
  • Urban and Online Population: Most of Brazil's population (87%) is urban and a large percentage (77%) is online. This has contributed to the significant growth of e-commerce in the B2C sector.
  • Evolving Preferences: Brazilian consumers are increasingly interested in healthier options, convenience, ethical sourcing, and sustainability. This is reflected in the growing demand for organic food, natural ingredients, and ready-to-eat meals. Health awareness is increasing, particularly among younger generations.
  • Digital Adoption: There has been a surge in e-commerce activities, accelerated by the COVID-19 pandemic. Consumers are increasingly comfortable with online shopping for food, with e-commerce sales for frozen food, for example, showing significant growth. Food delivery applications have also gained popularity, with a large percentage of smartphone owners using them.
  • Influence of Marital Status: Research suggests that marital status can influence perceptions of food delivery application attributes, with single individuals valuing price and variety more. Married individuals may have more regular eating patterns and higher consumption frequency in B2C food businesses.
  • Sustainability Consciousness: Brazilian consumers are becoming more aware of sustainability and social responsibility, with a significant portion indicating they buy sustainably produced items. Recyclable packaging is also preferred. However, the price of sustainable products can be a barrier for some consumers.
  • Quality over Brand: A majority of consumers value quality over brand when making purchasing decisions.

The Brazilian B2C e-commerce market is substantial, projected to reach US$62.6 billion in 2024, with online food service being a key vertical. The adoption of digital payment methods like Pix has also facilitated the growth of B2C e-commerce.

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